Dividing your target salary by 2,080 hours understates your rate by roughly 2.8×. Here is the number that holds up.
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It is 52 weeks × 40 hours, and an employee genuinely is paid for all of it — their holiday and sick days are paid by someone else. Yours are not. Five weeks of holiday and one week lost to illness and admin puts you at 46 working weeks, or 1,840 hours, before anything else happens.
This is the one that does the real damage. Nobody pays you to write proposals, chase invoices, do your bookkeeping, answer enquiries that go nowhere, or learn the thing you are about to be hired for. A freelancer billing 60% of their working hours is doing well — and that takes 1,840 hours down to 1,104 billable hours, a little over half the 2,080 you started with, with no costs counted yet.
Revenue needed = (take-home + overheads) ÷ (1 − provision)
Billable hours = weeks × hours × billable share
Rate = revenue needed ÷ billable hours
| Weeks worked | 46 |
| Working hours | 1,840 |
| Billable at 60% | 1,104 |
| Revenue needed ($60,000 + $6,000) ÷ 0.75 | $88,000 |
| Rate | $79.71 |
Now the other direction, which is the part that stings. Charge $28.85 across all 1,104 billable hours and you bill $31,846. Set aside 25%, pay the $6,000 of overheads, and you keep $17,885 for a full year of work. That is the missing $42,115. It was never stolen from you — it was never in the calculation.
Every default above is a placeholder; put your own in. Bill 75% of your hours and the rate falls. Take two weeks of holiday instead of five and it falls again. Carry a 35% provision instead of 25% and it climbs sharply. What should not change is the shape: start from what you need to take home, add what it costs you to operate, and divide by the hours you can genuinely sell. Never by 2,080.
The same error turns up wherever people price their own work. Home bakers are told to charge three times their ingredients, which ignores the four hours they spent — there is a calculator for that one too. It is always the same mistake: pricing from the visible cost and forgetting the one that never appears on a receipt.